Writing a business plan for financing: a business plan is not something you should put on a shelf and forget about. It should continually evolve as a business matures.

• Author: Martin, Michelle J.

Should you have a business plan? How often should you evaluate it? What goes into it? When will you use it?

"A business plan is not something that you write in January, then put away and forget about," states David Cottrell, "it is something you must take off the shelf in June, and ask yourself what you have learned in that time, making changes reflecting those lessons." As president and managing partner of Mikunda, Cottrell & Company, Certified Public Accountants and Consultants, Cottrell has seen his business plan morph exponentially since his company's founding in 1973. Cottrell's business plan has provided a roadmap to success, as the company has grown into the largest locally owned public accounting firm in Alaska.

AN EVOLVING MATTER

A business plan helps a business look ahead, allocate resources, focus on key points, and prepare for problems and opportunities. It is not an end product, but rather continually evolves as the business matures. For Kari Hall and Susan Hoedel, owners of Allure Day Spa and Hair Design, their business plan has seen them through not only the original merging of their businesses, but also future renovation plans. "It has been one year since our fire, and we are now looking to rebuild a new home. Our business plan has gone through many transitions and phases," states Hoedel.

Business plans have three major purposes: for communication, for management and as a planning tool. In terms of communication, it is used to attract financing and business partners. As a management tool, the business plan helps to track, monitor and evaluate. As a planning tool, it guides various phases of your business, providing detail as the venture grows and identifying obstacles.

A business plan incorporates all research, ideas and conclusions in one place. It focuses on how developing the product will be beneficial to your customers and investors. The importance of a comprehensive business plan cannot be overemphasized. For many businesses, outside funding, credit from suppliers, management of operation and finances, promotion and marketing, and achievement of goals and objectives depends upon the business plan. Lee Van Horn, vice president of real estate lending for Denali Alaskan Federal Credit Union, says financial institutions want to see logic behind assumptions. "We want to see a professional, well thought-out business plan. We want to see that there was due diligence practiced before the plan was written." The business plan is...